Currency as Debt: A New Theory of Money
Currency is a Public Utility
 

My Dear Friend,

I pause in my studies at the university to share with you some observations and new insights.

I enjoy my studies immensely and now understand your enthusiasm when you attended. So much to learn! However, I have noticed here a peculiar trait among some of the professors. Some have predisposed conclusions or theories about certain events and, despite their obvious intelligence, I find that such people often will not open their minds to the truth. In discussions and debates these professors invariably assume their conclusions are correct and then spend much of their lives seeking peculiar facts to support their foregone conclusions. The scientific method often requires stipulating a hypothesis and then testing that hypothesis. Good researchers adjust or abandon their hypothesis once the data proves the hypothesis incorrect. Not so with some of the individuals I meet along my journey here as they cling to their foregone conclusions.

My dear friend, since you have a keen interest in economics, I wish to share with you some new insights about money. I do so in that same spirit you always exhibited when returning home for holiday and hope that you will receive my letter accordingly.

What is money? In an introductory article to understand money, we discover that money is an intangible concept. Currency is the thing society uses as money and can be tangible or intangible. Although not identical by definition, the two words, money and currency, are often used interchangeably in economic discussions.

Currency used as money represents wealth but is not wealth itself. Regardless of whether one participates in barter, trade, or commerce, all such transactions are exchanges of wealth. In all transactions made using the concept of money, the currency represents an unfinished exchange of wealth.

Barter is the immediate or relatively immediate direct exchange of wealth, that is, goods or services directly exchanged for other goods or services. However, unlike direct exchanges of wealth through barter, the use of currency in trade or commerce introduces the time domain because there is a delayed exchange of wealth. In trade and commerce, when the concept of money is used, only one party immediately receives wealth. The other party receives currency. Therefore, that currency represents debt, that is, wealth not yet received. A person accepting currency in a transaction does not receive wealth but only a claim check to be later exchanged for wealth. In this instance, currency serves as a placeholder for future use to obtain wealth.

Similar to a concept in physics, another subject in which you have an interest, we can view the concept of money as potential energy, not kinetic energy. Just as an elevated tank of water contains energy not yet used, a given amount of currency represents a designated quantity but unspecified kind of wealth not yet possessed.

Barter encounters practical limitations as skills become more specialized and the division of labor more defined. Societies, needing a more efficient method to exchange wealth, use the concept of money, thus replacing barter with trade and commerce. Barter is not forbidden and many people still barter to this day, although on a small scale, because using the concept of money is so much more convenient.

Society employs the concept of money by consent. Currency is so convenient that almost every person becomes involved in a huge quest of exchanging wealth using the concept of money. In most transactions, the final goods and services desired are not immediately acquired by the person accepting currency.

Many people understand that currency is a medium of exchange. The phrase “medium of exchange” provides a clue that currency itself is not wealth. A “medium” is a go-between, an interface. Currency is the medium by which people exchange wealth.

Because most people use the concept of money to exchange wealth, and currency itself is not wealth but a claim check, currency represents a claim on the wealth of society. Society’s wealth is the total amount of its available goods and services. Since almost everybody engages in exchanging wealth using the concept of money and the recipient of currency does not immediately receive goods and services, society owes a debt to that person.

All currency is owned by somebody, but nobody in particular owns the concept of money, making currency a public utility in the service of society. All wealth comes with legal title as does all debt. The concept of money merely serves as an efficient means to exchange those titles.

With all due regard and affection,

Your friend
 

Editor’s Note:

To better understand the concept that the currency represents unclaimed wealth, please read Back to Basics—The Nature of Money.

To understand how NESARA restores the national currency to being a true public utility, please read the following portions of the bill:

• Part I. Banking and Monetary Reform, Section 2 Findings
• Part I. Banking and Monetary Reform, Section 3 Congressional Control Of The United States Monetary System

To understand the implications of restoring the national currency to being a public utility, please visit the What’s In It For Me? section.
 

General Obiwan ‘Ben’ Kenobi, from the novel Star Wars by George Lucas